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Unforgiven

The way lenders and collectors pursue consumer debt has undergone an aggressive transformation in America. Collectors today don’t give up easy, often pursuing debts for years. For many people, these changes have profoundly affected their lives.

The way lenders and collectors pursue consumer debt has undergone an aggressive transformation in America. Collectors today don’t give up easy, often pursuing debts for years. For many people, these changes have profoundly affected their lives.

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The law is clear: When far-flung members of the U.S. military are sued in civil court, judges must at least appoint lawyers for them.

But that basic layer of protection hasn't provided much help to the hundreds of service members sued in Virginia courts each year by high-cost lender USA Discounters.

The state routinely allows plaintiffs like USA Discounters to suggest which lawyers should be appointed. Moreover, the federal Servicemembers Civil Relief Act (SCRA) doesn't detail what those attorneys must do or how much they'll be paid for doing it.

Practically speaking, military legal experts say, that means the attorneys often don't do much at all.

An examination of recent USA Discounters' cases shows the company typically chooses local attorney Tariq Louka to represent service members, many of whom are on active duty and unable to get to court. For his $35 fee, Louka sends each of these clients an identical letter advising them of their rights under the SCRA to have their case delayed if they can't appear. But that's it.

A fee that "absurdly low" shows that the attorney "does not plan on doing anything more than generating a form letter," said John Odom, a retired judge advocate who has testified before Congress about the SCRA.

Louka's fee is charged to the defendants if the company wins a judgment – and the company almost always does.

ProPublica reviewed 11 USA Discounters cases in which Louka had a role. If the service member didn't respond to Louka's letter, as occurred in 10 cases, he informed the court that his work was done and the case should proceed. He doesn't typically try to call clients, Louka wrote in an email in response to questions from ProPublica.

Even service members who respond to the letter get little or no representation beyond that. Army Staff Sgt. David Ray was sued by USA Discounters in 2013 while stationed in Germany. Court records show he wrote to Louka to say he'd followed the company's "instructions to the letter," and the suit was unnecessary. Ray also wrote that he didn't think he'd ever be able to attend a hearing. Louka did not respond, according to Ray and the case file. Instead, he recommended that the suit proceed because Ray had "stated that he is not disputing this debt." Louka told ProPublica that he could not discuss any client's case without a written waiver. Ray, who remains on active duty, could not subsequently be reached to provide one.

Louka said he performs what he believes are his obligations under the law and the courts have broadly accepted his interpretation.

Other attorneys in the area have a similarly bare bones take on the law's duties. Freedom Furniture and Electronics also sues a large number of service members in Virginia courts. In three Freedom suits examined by ProPublica, Virginia Beach attorney William Parkhurst was appointed. In a 2011 letter to a service member, Parkhurst, who charges $75 per case, used much of the same language as Louka. Parkhurst declined to respond to questions.

SCRA experts say that attorneys appointed to represent service members should do much more, including examining the case file, attempting contact by phone and other means, and advising service members that there might be a defense to the suit.

"If you don't tell them what their rights are, then you're doing them a disservice," said Dwain Alexander, a civilian attorney with the Navy.

The law currently does not spell out these duties, said Mark Sullivan, a former judge advocate. "I think that's really important."

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